Europe proved it doesn’t work. Congress rejected it. Now California wants to try it anyway.
SB 1074, euphemistically branded the “BASED Act,” is Sacramento’s attempt to resurrect the American Innovation and Choice Online Act, a progressive antitrust bill that couldn’t survive contact with bipartisan congressional scrutiny. Its author, Senator Scott Wiener, has dusted off the federal corpse, grafted on provisions from Europe’s radical Digital Markets Act, and is now asking California to serve as the laboratory for an ideology that has made the European economy smaller and the average European poorer.
On the fringes of American politics, some of the most vocal opponents of the free market in America support radical antitrust changes like AICOA. Overtly anti-capitalist organizations like the Open Markets Institute and business-hating nativist groups like the Bull Moose Project support the suppression of their economic and social enemies through antitrust enforcement. Both are buoyed by the same radical intellectual project that animated the failed federal bill and President Biden’s FTC’s losing record in court. The consistent concern from these voices has been that the prices Americans are able to access in the market are too low. Biden’s competition advisor Tim Wu once lamented that the cost of flour for amateur bakers should be much higher. For antitrust radicals, consumer benefit is far less interesting than political power. California’s SB 1074 clearly follows this model.
Let’s be clear about what this is. SB 1074 is not a consumer protection or a competition bill; it is a competitor protection bill. It would make common business practices consumers love, such as seamlessly integrating products, offering two-day shipping, or preloading helpful apps on a device, per se illegal for a handful of companies that exceed an arbitrary market capitalization threshold. No consumer harm required. No market definition necessary. If you’re big enough, the business practices that made your products popular are now crimes, and your competitors are the ones who can drag you to court.
SB 1074 would explicitly prevent tools like Google Search from integrating with Google Maps, keeping search results from pulling up information that customers use to easily find and support small businesses. The bill would threaten Amazon Prime’s model of two-day and same day shipping since the program relies on working with sellers who are able to fulfill orders quickly–usually with Amazon’s help. Who is better off when wait times for products skyrocket, or the cost of shipping goes up? SB 1074 also takes a shot at the burgeoning American artificial intelligence economy by preventing certain businesses from integrating their AI products into their existing offerings. This slows American AI adoption and threatens vital AI investment.
The bill also abandons the consumer welfare standard, which is the framework that has guided American antitrust law for roughly the past half century and maps closely to the largest peacetime economic expansion in human history. In its place, SB 1074 installs a literal “big is bad” philosophy. A company’s stock price, a speculative and volatile metric, now determines whether its ordinary business practices are legal. The affirmative defense is so narrow it implies guilt unless a company can prove its innocence, inverting our system of justice.
The results will be predictable. The California Law Revision Commission, after a multi-year review, explicitly recommended against tech-specific antitrust regulation. SB 1074 overrides that advice entirely. Meanwhile, the European economy, which adopted this model first, has fallen far behind the American economy since the turn of the millennium. Europe has regulated itself into an open-air museum for American and Chinese tourists. Adopting similar rules in California would make the state’s affordability crisis worse.
SB 1074 deserves the same bipartisan buzzsaw that took down its federal counterpart. Free market Republicans led that fight, and they were joined by thoughtful Democrats who understood that obliterating the economy wasn’t the best way to help their constituents. California Senators Diane Feinstein and Alex Padilla criticized the original federal bill for specifically targeting California’s economy, undermining cybersecurity and handing a major geopolitical economic win to China. California’s House delegation similarly spoke out against the disastrous implications of the bill. A proposal that received such vocal disapproval from California leaders must now be rejected by the state itself.
At its core, SB 1074 would force Californians to pay more and get less so competitors who couldn’t win in the market can win in the courthouse. That’s not competition policy; that’s politics.